Family Law customers are typically shocked to hear that there’s no specific formula to establish every party’s entitlement in a property division, as opposed to child support for example. There’s excellent reason for this – every single party to a relationship is distinctive, each relationship is unique and everyone’s financial circumstance is unique.
The Family Law Act supplies a 4 step procedure in determining a property settlement in marriage (and now in de facto relationships also):
Identify and value all the assets owned jointly or individually or on behalf of a client (ie trust or provider)
Full financial disclosure is needed by the Family Law Act. It doesn’t matter in whose name an asset is held – it is all part of the asset pool to be considered and possibly divided.
Identify every party’s contribution to those assets and the whole relationship
In a long relationship contributions are usually seen as equal. Typically one person has contributed a lot more by way of financial contribution, and the other has contributed much more by way of non-financial contribution in caring for young children and sustaining the dwelling. The Court most typically treats every party’s contributions as getting equal.
Assess each party’s future demands
The Family Law Act offers a list of factors to be taken into consideration including relative responsibility for youngsters, health, earning capacity, age and so on. Generally there is a 10%, 15% or 20% adjustment to 1 party, for instance, exactly where they may be the primary carer from the youngsters and have a lower earning capacity.
Lastly, think about no matter whether this can be “just and equitable”
Within the fairly typical case of a long marriage, dependent kids, wife a stayat- house Mum (or part-time employee Mum), the husband with a superior earning capacity and an asset pool of $1,000,000.00, the wife may well get 70%. With an asset pool of $2,000,000.00 the wife may well get 60% and with an asset pool of $10,000,000.00 the division to the wife is more likely to become 50%. As you are able to appreciate, as the asset pool gets higher, there is less ought to give the “poorer” party an adjustment above 50% to assist them give for their future.
Ironically, above $10,000,000.00, if one individual is responsible for the wealth, contributions could not be deemed to be equal along with the party with the entrepreneurial flair may perhaps be given credit for a higher contribution – basically because their contribution is argued to be far above the norm.
In the end from the day when taking your matter to Court, you put the outcome of one’s property settlement in the hands of the Appraise or Federal Magistrate on the day. The Family Law Act does not present a formula, but offers the Judge or Federal Magistrate a method which he or she ought to apply. In theory they may be objective. In practice, there is a very good deal of subjectivity, and various judges will give distinctive outcomes. Just after all, what’s just and equitable to 1, may well not be to another. Which is fantastic incentive to resolve a property matter by way of collaboration, mediation or negotiation. Or enter into a prenuptial binding monetary agreement and avoid Court altogether.
Do ask us concerning the option, and least stressful, approaches of resolving these matters.